Before Ray Ozzie took the stage at the Technology Alliance's lunch today, the group presented its annual benchmark study comparing Washington with 10 states it considers peers for centers of technology. The alliance is a statewide group of business and academic leaders working to promote a strong technology economy.

Jeremy Jaech, the incoming chair of the alliance, said the state ranked last among peers in strong graduate programs for science and technology. Peers include Massachusetts, Maryland, New Jersey, Connecticut, Virginia, California, New York, Colorado and Utah. In 2005, 7.4 science and engineering doctorate degrees were awarded per 1,000 Ph.D.s in Washington, compared with 26.8 per 1,000 in Massachusetts. That puts Washington at 46th out of 50 states.

The state is also not producing enough bachelor's degrees to keep up with the science and engineering workforce, according to the alliance report. The state is 36th in the nation for overall bachelor's degree production, based on the number of degrees awarded as a percentage of the state's college-age population.

"We're most concerned about what benchmarking tells us about higher education," said Jaech. "While we have qualitatively strong programs they are too small."

The good news that came out of the report is that the state has a strong engineering workforce, active venture-capital community and strong federally and privately funded research. Washington ranks third in the nation for engineering employment, moving up from ninth place six years ago. The state also ranks third in the nation for the amount venture capital invested per $1,000 of gross domestic product, after California and Massachusetts.

Craig Mundie, Microsoft chief research and strategy officer, said Americans seeking to update their technology skills should look to the nation's community colleges for training.

Mundie took a break from the company's Government Leaders Forum -- Americas on Wednesday to talk with me about global competitiveness, the government IT spending environment, prospects for cloud computing in government IT portfolios and more.

Earlier in the day, Mundie talked to the gathering of Latin American governors and ministerial-level leaders about using technology to improve health care and education. Microsoft Chairman Bill Gates is scheduled to address the group, meeting in Leesburg, Va., on Thursday.

Here are edited excerpts from my talk with Mundie:

Q: You remarked on the idea that technology has been a great global leveler, contributing to developing nations' transition from industrial and agricultural economies to knowledge-based economies. What's available for people in this country who are facing layoffs now and want to compete on that global playing field that technology creates?

Watching the NCAA men's college basketball tournament on the Web at work is great. The on-demand player that CBSsports.com has built for March Madness on Demand, using Microsoft's Silverlight, is not perfect, but it's a great way to keep up with the tournament, live, while still "working."

I think the people behind the player might take a bit of pleasure in facilitating this "borrowing" of work time. There's a "Boss Button" on the player that brings up a spreadsheet. And the promo video that rolls when you launch the player exclaims something to the effect of, Forget that 2 o'clock meeting. There's a 2 o'clock tip off.

But is the tournament, which is now easier than ever to watch at work thanks to the Silverlight app, really the productivity sink it's rumored to be? Staffing firm Challenger, Gray & Christmas floated an estimate of $3.8 billion in lost productivity for the 2006 tournament, a figure that many people questioned (though many others did not) and Jack Shafer, writing at Slate, picked apart.

Rogers Weed, who held several positions at Microsoft, including corporate vice president of Windows product management, will be director of the proposed Washington Department of Commerce, Gov. Christine Gregoire announced today.

Microsoft CEO Steve Ballmer addressed a packed auditorium of public sector technology executives gathered at the company's Redmond headquarters for its seventh U.S. Public Sector CIO Summit this week. He touched on some of the economic themes that have come up in several of his speeches recently, giving his take on funding for innovative ideas in a down economy and investors' reactions to Microsoft's cost-cutting measures. Ballmer also expressed some disappointment in the progress of Windows Mobile and gave his thoughts on marketing Windows 7. Read on for highlights.

New research sheds light on the reasons high-skilled Chinese and Indian workers are returning to their home countries. The researchers cite anecdotal evidence that suggests immigrants are returning home in greater numbers.

The thousands of contractors who work at Microsoft through third-party agencies are facing pay cuts beginning Monday, as Microsoft continues to look for ways to cut costs.

Microsoft and its contracting agencies agreed to a 10 percent cut in the bill rate, impacting all temporary worker assignments. Several contract employees have said the reduction is being passed on to them in the form of a pay cut. One person said some agencies are seeking to pass deeper pay cuts onto their workers. Several contractors contacted The Seattle Times, asking for anonymity for fear that speaking out would jeopardize their jobs.

The 10 percent cut is for existing contracts. New contracts will have a 15 percent reduction in the rate.

Another contractor said the cuts impact so-called "a-dash" employees, also known as contingent staff. It's not immediately clear if "v-dash" employees, who are vendors, are facing similar cuts.

Notification of some contract employees began Tuesday. Microsoft does not disclose how many contractors it employs. These workers staff reception desks, test software, provide specialized consulting services and perform other functions that keep the company running through outside agencies. Sid Parakh, analyst at McAdams Wright Ragen, has estimated the figure to be around 40,000.

With Microsoft's Redmond campus largely emptied out for the winter holidays, CEO Steve Ballmer crunched the numbers on the proper level of spending for his company against the current economic climate, which he has repeatedly referred to as a "reset" rather than just a recession. Ballmer said his own estimates for the weakness and duration of the downturn tend to be more severe than those of other business leaders he meets.

With that in mind, he settled on $27.5 billion of operating expenses -- a level the company aims to hold relatively steady through the current fiscal year, which ends June 30, and during its 2010 fiscal year. Ballmer made clear to financial analysts meeting in New York this morning for the company's annual strategic update that cutting back even more significantly -- say to $20 billion -- would be "imprudent."

"I think this is right," Ballmer said.

That should give some comfort to those wondering if the modest layoffs Microsoft announced last month were the beginning of a more significant reduction. Wall Street analysts and investors are pressuring companies in every industry to continue cutting costs as sales and profits slow dramatically.

The strategic update call just came to an end. Ballmer gave a detailed look at seven major business areas for the company. Check back here later this morning for more details.

Update, 7:50 a.m.: As he told Congressional Democrats earlier this month, Ballmer said Microsoft's corporate strategists have been evaluating past downturns -- particularly those driven by "deleveraging." The team read company annual reports from 1927 to 1938 to determine who did a good job managing through the Great Depression. "RCA, God rest them in peace, became our role model," Ballmer said. The company was able to dominate the television business because it continued to invest during bad times, he said.

In January, Microsoft's U.S. Xbox 360 sales increased 34 percent and Nintendo saw sales of its market-leading Wii console jump 148 percent over the same month a year ago, according to NPD Group figures released this afternoon. Sony, however, saw its third consecutive month of lower PlayStation 3 sales, compared with the year earlier.

Microsoft CEO Steve Ballmer gave his take on the economy during the U.S. House of Representatives Democratic Caucus Retreat in Williamsburg, Va., today. He also shared this anecdote about Microsoft's early days and Bill Gates worries about being able to make the payroll.

"And every time I sat down, in every corner, nook and cranny of couches, tables, I'd find these little yellow pieces of paper with Bill's writing that had a bunch of people's names and companies' names and numbers," Ballmer said.

Razorfish, the digital advertising agency that Microsoft gained when it acquired aQuantive in 2007, is going through another round of layoffs. A spokeswoman confirmed that the company laid off about 70 people on Thursday on the West Coast, including its Seattle headquarters and offices in Portland, San Francisco and Los Angeles.

A German composer, Johannes Kreidler, has found another interesting use for Microsoft's new Songsmith musical accompaniment software. His composition, Charts Music, derives melodies from stock-price charts of Lehman Brothers, Bank of America, GM and other major global companies and market indexes, as well as unemployment rates and other indicators. The melodies are plugged into Songsmith to create short, unsettling songs for each chart. Kreidler doesn't limit himself to traditional financial indicators. He also includes charts of Iraq War deaths and growth in the porn industry. [Update, 6:05 a.m.: Kreidler explains more about the how and why of his composition after the jump.]

"IBM has established Project Match to help you locate potential job opportunities in growth markets where your skills are in demand. Should you accept a position in one of these countries, IBM offers financial assistance to offset moving costs, provides immigration support, such as visa assistance, and other support to help ease the transition of an international move."

The request, part of a policy brief written in June 2008 and posted to the Obama-Biden Transition Project Web site in early January, does not represent a new stance for the company, which has long lobbied for changes in U.S. immigration policy around high-skilled workers. But its posting on the new administration's transition Web site came at a sensitive time, against the backdrop of layoffs -- which hit a "significant number" of guest workers at the company -- and pressure on Microsoft by Sen. Chuck Grassley to retain U.S. citizens over similarly qualified guest workers.

The Obama Administration's transition Web site is no longer active, but here's a PDF (2 pages) of the brief, which also asks for changes in the student visa policy to encourage foreign students educated here to stay and an increase in green cards.

In a press release issued moments ago, Microsoft announced that it is cutting up to 5,000 jobs in research and development, marketing, sales, finance, legal, human resources and IT in the next 18 months, starting with 1,400 today.

It marks the first company-wide layoff in Microsoft's history and comes as the company reports fiscal second-quarter earnings that missed the low-end of its own guidance for sales and earnings per share. Its Windows business declined 8 percent as PC sales growth ground to a virtual halt in the quarter ended Dec. 31.

"While we are not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach," CEO Steve Ballmer said in a statement. "We will continue to manage expenses and invest in long-term opportunities to deliver value to customers and shareholders, and we will emerge an even stronger industry leader than we are today."

The company has pulled its financial guidance for the remainder of the 2009 fiscal year, which ends June 30, blaming "the volatility of market conditions going forward."

CFO Chris Liddell said in a statement, "Economic activity and IT spend slowed beyond our expectations in the quarter, and we acted quickly to reduce our cost structure and mitigate its impact. We are planning for economic uncertainty to continue through the remainder of the fiscal year, almost certainly leading to lower revenue and earnings for the second half relative to the previous year. In this environment, we will focus on outperforming our competitors and addressing our cost structure."

The only guidance the company offered is its expected operating expenses for the full fiscal year: $27.4 billion.

Microsoft executives are expected to talk with analysts about the second-quarter earnings announcement and cost-cutting plans at 8 a.m. The earnings report and conference call was originally scheduled to take place after the close of the stock market.

Microsoft's second-quarter results were:

Sales: $16.63 billion, up 2 percent from a year ago, but well below the low-end of Microsoft's guidance of $17.3 billion to $17.8 billion and the consensus of Wall Street analysts, which was $17.08 billion.

Earnings per share: 47 cents, down 6 percent from a year ago, and also below the low-end of the company's guidance of 51 cents to 53 cents, and the consensus of Wall Street analysts, 49 cents.

In addition to the job cuts, Microsoft is eliminating merit increases in the 2010 fiscal year, which begins July 1, the company disclosed in its quarterly report, filed with the SEC.

This, combined with job cuts, and an already announced series of steps to trim expenses, is expected to "reduce our annual operating expense run rate by approximately $1.5 billion," the company wrote in the report.

Microsoft employees I spoke with this evening were preparing for a major announcement -- possibly news of layoffs -- from the company early Thursday. One person expected to be notified around 7 a.m. No one I spoke with had details on the size of any job cuts or specific groups that might be affected. All were looking forward to the prospect of the persistent, distracting layoff rumors being put to rest -- one way or another. The company is also scheduled to report its fiscal second-quarter earnings on Thursday afternoon at the close of the trading day.

Here's an early look at story in Thursday's paper on what several financial analysts are expecting from the company in terms of layoffs and cost cuts:

Global tech bellwether Microsoft reports its second-quarter earnings Thursday amid persistent chatter and speculation about its cost-cutting plans, including whether the company will announce its first significant layoffs.

In the Puget Sound area, where Microsoft has more than 40,000 full-time employees and thousands more working on contract, a major layoff could deliver another blow after unemployment climbed to 6.1 percent in December (not adjusted for seasonal changes), the highest level since November 2003.

With the prospect of a significant job cut at Microsoft looming Thursday, we took a moment to review the occasions over the past decade or so when the company has trimmed jobs through reorganizations and other changes. While sifting through these numbers, remember that during the same period -- 1996 to 2008 -- Microsoft has grown total worldwide employment more than 340 percent from 20,561 to 91,259 as of June 30. The hiring continued through the latter half of 2008, albeit at a slower rate. As of November, Microsoft counted 95,664 employees globally.

June 2006: 148 positions in the U.S. sales group, including 98 in Redmond, were cut to "better align a small subset of field and headquarter positions more closely with the needs of our enterprise customers and partners."

Microsoft's rapid facilities expansion in the Puget Sound area is slowing as the company navigates the bleak economy.

A source provided details of a plan including changes to construction projects, which this person said was approved by Microsoft Chief Financial Office Chris Liddell in December. The person asked for anonymity while sharing internal details.

The plan calls for a three-year delay of all construction projects, with the exception of Building 111. This apparently refers to new construction, as Microsoft is planning to complete the major West Campus expansion it embarked on in 2006, with some buildings ready for occupancy as early as this spring.

Microsoft spokesman Lou Gellos said the company was limited in what it could say because it is in a "quiet period" ahead of its second-quarter earnings report on Thursday.

"Like any well-managed business, we routinely check our assumptions and planning needs against our assessment of the economic environment," he said in a statement. "As part of this process, which we undertake quarterly, we look at many scenarios and options. ... In light of the economic situation, we will also delay some planned construction on the north part of our campus."

An early look at a story in Thursday's paper: Some Microsoft employees were bracing for news of a possible reorganization that could be communicated internally Thursday. A Microsoft spokesman declined to comment, consistent with the company's handling of persistent rumors swirling around plans for cutting costs to account for deteriorating economic conditions.

[Update, Friday: A minor organizational shift in the Windows Live Engineering group emerged Friday.]

LAS VEGAS -- Steve Ballmer is on stage now. For a rundown of what he's expected to announce, see this post.

He asked the audience to join him in a round of applause for Bill Gates -- Microsoft co-founder and chairman, and his predecessor on the International Consumer Electronics Show stage -- for his decision to devote the majority of his time to helping people around the world, particularly children in Africa. The full house (though not overflowing) obliged.

Here's a preview of a story running in tomorrow's paper on the outlook of the Consumer Electronics Association's own economist and analyst.

LAS VEGAS -- The consumer electronics industry gave a sober assessment Tuesday of the hits its primary customers -- consumers -- have taken in the past year. But the industry's economists also had plenty to cheer about as their products are accounting for a growing share of consumer spending.

"As you'd expect, as consumers lost a tremendous amount of wealth in real estate and in equity holdings, you saw them cut back on what they were buying," Shawn DuBravac, economist with the Consumer Electronics Association trade group, said Tuesday as the International Consumer Electronics Show chugged to life here.

LAS VEGAS -- Lim Seng, 45, has been driving a cab in this city for 15 years. When he picked me up at the airport today, I peppered him with questions about the International Consumer Electronics Show ("everything is smaller than usual") to his outlook on the Vegas economy (not so good).

Here's an early look at a story running in Monday's paper on the outlook for the International Consumer Electronics Show against the backdrop of the worst consumer-spending environment in years. I'll be in Las Vegas covering CES beginning Tuesday. Check back here for updates throughout the week.

Still, there is a lot of chatter going on about cost cuts at Microsoft and whether they will include layoffs or layoffs disguised as something else. Microsoft is making no official comment on any of this -- as is its practice -- and I doubt they will until they're ready to make a formal announcement.

I can report that I've heard from a handful of contractors whose contracts at Microsoft were abruptly cut short.

Mini-Microsoft has drawn an ominous red circle on his calendar around Jan. 15. That day, the anonymous, unsanctioned company blogger suspects, could bring news of a substantial round of layoffs at Microsoft. While his post of last week (just after I stepped out for vacation) is clearly labeled as rumor, even the thought of cuts at one of the region's biggest (and heretofore most stable) employers can only send shivers down the spine of Seattle's cold and wet economy.

Microsoft has been recognized by a survey of major corporations as doing the best job of investing in its community. The survey was part of a study published by the U.S. Chamber of Commerce and the Center on Philanthropy at Indiana University.

The study was presented with a broader report on the relationship between business and their communities. Seattle was one of eight cities where the report held forums with business leaders, providing a not-too-surprising list of threats to innovation: education, "the Seattle process," and transportation. Read on for more details.

Adobe today announced a restructuring program that will cut 600 full-time positions globally, about 7.8 percent of its work force. We know of at least one person laid off in Seattle today, where the company had 500 employees at last check. The company did not provide specifics, but a spokesperson noted that "the impact is across the board -- all regions, business units and/or functional areas are being impacted in some way."

Neil Holloway, vice president of business strategy for Microsoft International and a 19-year veteran, gave investors a broad view of the company's hottest topics at a conference this morning. A Webcast can be found here. What follows is a summary of his main points.

What customers are saying. A few messages are coming through clearly, Holloway said during the Nasdaq OMX Investor Conference. "Help me save money" and "help finance me either as a partner or as an end customer," he said.

Microsoft is "cautiously optimistic" about its video games business, Shane Kim, vice president of games strategy and business development, told Reuters at the news service's Media Summit today. Kim said the business is on track for 20 percent this year, but "people are not projecting that kind of growth" for 2009. "Who knows, maybe flat performance will be considered a remarkable achievement."

Dan'l Lewin, corporate vice president of Microsoft's Strategic and Emerging Business Development, has a good view of the tech startup climate from his post in Silicon Valley, where he helps get Microsoft's tools into young companies' hands.

He shared his observations and more about the announcement today of the "BizSpark" program, giving qualified startups three years of access to an array of Microsoft software for $100 (story, program site), in an interview yesterday.

Five years ago, Microsoft could not have trotted out examples of its wide-ranging anti-piracy efforts from 49 countries, as it's doing Tuesday. The announcements are a testament to the company's effort to build expertise and partnerships in a multi-front battle against piracy. But five years ago, global software piracy was less pervasive and less financially damaging than it is now.

Analyst firm Gartner reported third-quarter PC shipments grew 15 percent year-over-year to 80.6 million units, lead by strength in the newer mini-notebook segment. But analysts continue their skeptical view of the tech sector -- which begins reporting September quarter earnings this week -- in anticipation of tighter IT budgets.

Markets are rallying this morning (major indexes up around 4 percent in early trading) in response to efforts by governments around the world to guarantee lending and calm last week's financial turmoil. But even if this is the beginning of the end of the beginning, enterprise software companies including Microsoft are in for a painful hangover, according to analysts at Friedman Billings Ramsey.

This is the last day of Microsoft's fiscal 2009 first quarter. While Silicon Valley tech companies were telegraphing layoffs last week to trim expenses and tidy up the bottom line as the quarter came to a close, not so at Microsoft. (Check back Wednesday for an update on employment growth at the company.)

Microsoft will announce its fiscal first quarter earnings on Thursday, Oct. 23, after the markets close.

Goldman Sachs is out this morning with an extensive review of the software industry as second-quarter earnings begin rolling in next week. Broadly, the analysts see chief information officers -- CIOs -- tightening their belts.

With Yahoo, Microsoft and Carl Icahn waging a public campaignto win shareholder hearts and minds (and, most important, votes), a few more interesting reports surfaced this afternoon: One major Yahoo shareholder is said to be leaning toward Icahn's slate of director candidates. Meanwhile, any potential Yahoo-AOL deal would be on hold until after Aug. 1.

All of this as the titans of the online and media worlds head toward Sun Valley, Idaho, for the annual Allen & Co. deal-making retreat.

Microsoft Chairman Bill Gates conceived of the CEO Summit 12 years ago as an exclusive forum to discuss technology and other issues worrying the business world's elite. It's also an excellent sales opportunity for Microsoft. This year's event kicked off last night at the Fairmont Olympic Hotel in downtown Seattle.

Microsoft Chairman Bill Gates is scheduled to testify before the House Committee on Science and Technology Wednesday morning in what is likely his last appearance on Capitol Hill as a full-timer at the company he co-founded.

As he did just more than a year ago, Gates is expected to press Congress on the need to raise the cap on H-1B visas and improve the quality of U.S. high school graduates -- particularly in math and science. (Update, 9:40 a.m., Wednesday: Here's Gates written testimony, a 20-page PDF. Excerpts after the jump.)

BusinessWeek, having reviewed the latest H-1B numbers, reports that "Indian outsourcers accounted for nearly 80 percent of the visa petitions approved last year for the top 10 participants in the program." Only two "traditional U.S. tech companies" are among the top 10 participants. Can you guess who?

Earlier this week, news stories across the Internet and in every major business publication had Google on the rocks. A comScore report on paid clicks showed an 8 percent decline from December to January and flat annual growth. Google's shares tumbled $22.25 on the news Tuesday to close at $464.19, wiping $5.2 billion off the company's balance sheet. It was also viewed as another sign of the economic slowdown dragging on the lifeblood of Web 2.0, online advertising.

Today, comScore posted a blog explaining why that reaction misinterpreted the Internet measurement company's data, and behind the decline in paid clicks actually is a positive trend for Google.

Oops.

While comScore isn't saying everything's rosy in the broader economy, the company is correcting the record, in some detail, on what's going on at Google:

"The evidence suggests that the softness in Google's paid click metrics is primarily a result of Google's own quality initiatives that result in a reduction in the number of paid listings and, therefore, the opportunity for paid clicks to occur. In addition, the reduction in the incidence of paid listings existed progressively throughout 2007 and was successfully offset by improved revenue per click. It is entirely possible, if not likely, that the improved revenue yield will continue to deliver strong revenue growth in the first quarter."

And in the broader economy?

"Separately, there is no evidence of a slowdown in consumers clicking on paid search ads for rest of the U.S. search market, which comprises 40% of all searches."

Not everyone is buying comScore's interpretation of its own data, however. At Silicon Alley Insider, Henry Blodget continues "to view the comScore report as supporting the theory that Google is exposed to economic weakness."

As investors rub their whip-lashed necks, Microsoft is preparing to report on its fiscal second quarter -- the three months ended Dec. 31 -- on Thursday after the bell. A link to a live Webcast of the company's earnings conference call, beginning at 2:30 p.m., will be posted here.

Analysts are looking for a strong quarter, but as has been the case with other big tech reports in recent weeks, the company's outlook will probably get more attention than its Q2 numbers.

Thomson Financial polled 30 analysts on Jan. 15. The consensus estimate is earnings of 46 cents a share, which would be at the high end of the range Microsoft issued at its last quarterly report, which, you'll recall, blew the doors off.

Goldman Sachs analyst Sara Friar last week put Microsoft back on her "Americas Conviction Buy List," She said she views the stock as "defensive in a tough macro environment," pointing to the company's "broad international exposure with derivative currency benefit."

In another note Tuesday, however, Friar and other Goldman analysts expressed concern about the broader software sector in light of the economic downturn, noting that "a slowing U.S. economy may spread overseas, removing a key tailwind for the group."

A gang of local politicos, venture capitalists, computer science profs and reporters gathered at Google's swank new Fremont engineering office this morning to check the place out. The company is eager to highlight its new digs, which opened in October and now houses close to 100 -- with plenty of room for more.

Tonight, the company is inviting would-be recruits to tour its space in the three-story Waterside Building fronting the ship canal in the Center of the Universe. The space used to be occupied by Getty Images, which has contracted its footprint in the neighborhood in addition to cutting staff. But Fremont -- and really the stretch from there to the University of Washington -- has turned into something of a high-tech strip, with Adobe, Impinj, Telecom Transport Management, the Institute for Systems Biology and the Allen Institute for Brain Science, among others.

Google's events today, along with a big billboard on the Queen Anne side of the Fremont Bridge that looks like a well-used software engineer's white board, appear to be recruiting. Google is aiming to raise its profile as a top destination for engineering talent in the region, and by all accounts, it has been successful, particularly at grabbing graduates from the UW. Brian Bershad, a UW computer science professor, joined Google in October and is director of the Fremont site.

The company's presence in the region now stands at more than 500 broken down like this: 400-plus in the Kirkland Engineering office, opened in October 2004, and is now, maybe, the second-largest Google office outside of Mountain View (New York City might be bigger, they weren't sure); 75-plus in the Fremont Engineering office; 25-plus in the Fremont sales office.

At last count, in September, Google had 15,916 employees spread across 40 engineering sites in 18 countries, and growing. On a tour today, an engineer said, "We seem to be growing at Moore's Law rate. If you look at the company, it's doubling every 18 months now."

Executives touted amenities at the Fremont office and gave a glimpse of working life for a Googler.

U.S. patent database producer IFI Patent Intelligence today released a ranking of the top patent recipients in 2007. Microsoft ranked sixth, with 1,637 patents received last year, up 12 percent from 2006. Microsoft was one of a handful of companies -- the minority of the top 25 -- to increase the number it received.

The U.S. Patent and Trademark Office issued 157,284 "utility patents" last year, down 9.5 percent from 2006, which was a record year.

As more software functions move to the Internet, where the traditional software licensing business model has limitations, companies are experimenting with new business models such as subscriptions and advertising-supported software.

Microsoft is trying it with its Works suite, which comes standard -- and free to the user -- on many new computers. Likewise, Google Docs and Spreadsheets -- online versions of the productivity apps dominated by Microsoft -- are advertising supported. Now Adobe, a leader in rich Internet applications with its Flash player and nearly ubiquitous PDF reader and writer, is getting into the act with help from Yahoo.

On Thursday, the companies announced a partnership to allow publishers to serve contextual ads into PDF documents. Like all of these early ad-funded software efforts, this is a test program for starters and it's opt-in.

From the release: "The new service allows publishers to generate revenue by including contextual, text-based ads next to Adobe PDF content, with Yahoo! providing access to its extensive network of advertisers to match a broad range of subject matter. For advertisers, Ads for Adobe PDF Powered by Yahoo! extends reach by delivering advertising across a new channel of content, while also providing the ability to track advertising performance, just as they can today with ads placed on Web sites."

The program will open up new real estate for its advertisers, according to Todd Teresi, svp of Yahoo!'s publisher network, especially among small-time customers that don't even have Web sites. Example: Local youth soccer leagues that create weekly e-mail newsletters could generate funds through contextual placements for soccer equipment and jerseys -- and even minivans, he said.

"The primary users long term are going to be down the tail," Teresi said.

The program is offered as a free service to US-based publishers who produce English content. Early adopters include IDG InfoWorld, Wired, Pearson's Education, Meredith Corporation and Reed Elsevier.

That's a quote from this New York Times story about how beneficiaries of the tech outsourcing boom in India are trying to combat poverty in their own country.

Sean Blagsvedt, a veteran of Microsoft Research in India and founder of a kind of social networking Web site for poor people who don't have their own computers, was of course referring to his former employer's headquarters. "In India," he continued, "you can't escape the feeling that you're really lucky. So you ask, What are you going to do about all the stuff around you? How are you going to use all these skills?"

The story goes on to describe how technology companies are using India as a laboratory for technology to serve, as Microsoft execs might put it, the next billion people.

Microsoft earlier this year formalized its approach to doing business in the emerging economies of the world with its "Unlimited Potential" program. And during its last quarter, the company saw 40 percent growth in the fast-emerging economies of Brazil, Russia, India and China.

Microsoft paid leading market-researcher IDC to draw up a major report of the economic impact of the IT industry -- and Microsoft's share of it -- on the global economy.

The big takeaway, no suprise: IT drives a big part of the global economy, and software in particular has a disproportionately large impact.

After studying 82 countries and regions, IDC found that $1.2 trillion, or 2.5 percent of 2007 global gross domestic product, can be traced back to the IT industry. That share is expected to grow to 2.75 percent by 2011.

The report gives Microsoft and its "ecosystem" -- described as "hardware, software, services, and channel firms as well as end user organizations running Microsoft software" -- credit for $400 billion in 2007 revenues and 42 percent of IT employment globally.

Pamela Passman, Microsoft's vice president of global corporate affairs, said the report is useful to the company in talks with government officials.

"What's most interesting about this are the trends that we see and for the audiences that we want to talk to about this, which is significantly policy makers," she said. "It's important for them to understand the trends, as they think about how they make resource allocation decisions."

Packaged software -- Microsoft's bread and butter, also the stuff provided to big enterprise customers by IBM, Oracle and SAP -- represents 21 percent of IT spending. But this sub-category of the industry generates half of all the IT jobs.

IDC chief researcher John Gantz explained why software has an out-sized impact on employment in the industry.

"For every dollar of software sold there's $1.25 of services around that software to be sold," Gantz said. Those services include training, installing, integrating, and working with software and also the software distribution channel, he said.

What about software's share of IT spending vs. hardware and services?

"In general, the software market is growing faster than the hardware market so over time that share will go up," said Gantz. He added that software's growth has slowed since the late 1990s -- hardware growth has slowed more -- when software spending was in the 15 to 20 percent range.

Today, software is growing about 6 to 8 percent a year. So what's causing the slow down?

"We call it basically the software complexity crisis," Gantz said. "It's fundamentally that so much of the software has to be integrated with older software that it slows the adoption down." (That also creates plenty of jobs for IT pros who can integrate the latest and greatest with legacy systems.)

How might the trend toward software as a service or, in Microsoft's terms, software plus services, affect growth of this part of the IT industry?

Right now, Gantz said, software as a service is counted by IDC as a service, and despite all the attention it's getting, "actually there's not enough of it to really make a difference.

"It's Microsoft Office Live, Dynamics Live, Salesforce.com, and out of $220 billion for a total software market, there's not all that much activity," Gantz said. "It's the wave of the future, but the amount today is not that high."

How many people have companies like Microsoft lost over the years because of the commuting nightmare between Seattle and the Eastside? Maybe none, maybe only a few. Considering the worsening traffic situation for people who need to work on one side of the lake every day, but want to dwell on the other, life is definitely not easy.

THOMAS JAMES HURST / SEATTLE TIMES

Arteries clogged daily

Now it sounds like some tech companies are finally getting wiser because our local transportation officials are not.

Today we're seeing a stream of news about Microsoft's possible plans to expand along South Lake Union and F5 Networks building up its waterfront campus and opening a new R&D center in Bellevue. Meanwhile, Google is serving up perks on both sides of the water. The locations all seem aimed at lessening employees' commuting woes.

If more companies would match F5's incentive program, which gives employees up to $300 a month if they bike, walk, bus or carpool to work, the traffic situation just might improve a bit more.

With the 2008 Olympics in Beijing now less than a year away, we're getting in the mood for medals. And we can consider Microsoft's Imagine Cup, a global technology and creativity competition among students from around the world, the Olympics of software. So, with the winners of this year's cup announced today, let's do a "medal count" -- admittedly an imprecise measure because of inconsistent factors from country to country such as population and resources -- and see which countries have the top young technology talent.

The Imagine Cup has nine events from Algorithm to Short Film. Microsoft lists the top three finishers in each category. There's also an interactive map of the world showing all finalists by category and country.

Both China and France had four teams finish in the top three, the most of any country, but each had only one first place. China's was in the IT Challenge, which asks competitors to "demonstrate proficiency in the science of networks, databases, and servers, as well as the areas of analysis and decision making in IT environments." The French team took first in Web development. (Taiwan also had a second-place finish.)

Poland had three winning teams, all of which finished first. The country dominated the visual arts, winning the photography and short film categories, as well as the algorithm category -- perhaps the most demanding of the event. It's an individual competition comprised of "brain teasers, coding challenges, and algorithmic puzzles."

Romania and Brazil had two top-three finishers each.

In the high-profile software design category, in which teams of students used Microsoft technologies to design applications to improve education, Thailand took top honors, followed by Korea and Jamaica.

The United States had several finalists, but no top-three finishers. Those so inclined to do so might read this as another piece of evidence that the U.S. is lagging the rest of the world in math and science education.

The WSA, the state's technology trade organization, said today that it has named five new members to its board.

They are:

Ron Craswell, engineering director, Google : Craswell, one of the leaders at Google's Kirkland office, oversees a number of Google projects, including parts of Google Maps, Webmaster Tools and Google Pack. He previously was vice president of engineering for Seattle-based M:Metrics.

Carla Stratfold, senior vice president of RealNetwork's program integration office: Stratfold joined RealNetworks in 2001 to work in sales. Before that, she was at Oracle.

James Sun, CEO, president and founder, Zoodango : Sun was runner-up on the NBC show "The Apprentice" this year. He started out by running an investment trading company during his college years. Before creating Zoodango, he worked as a management consultant at Deloitte Consulting.

Jennifer Shettleroe, vice president of engineering, Attachmate:
Shettleroe joined Attachmate in 1995, holding key leadership positions in product development, information technology, technical support and corporate training. She has a 20-year career in software development and delivery.

WSA board has 35 members. Along with President and CEO Ken Myer, the board drives the direction of the organization.

In 2002, we wrote about how unused office space was draining the bottom lines of tech companies in the region.

The companies either had secured extra space to accommodate their growth, which never came, or laid off employees, creating a glut.

In that story, we reported that Onvia, an online government-contracting service, lost $5.2 million at its two Seattle buildings (about 100,000 square feet).

Today, the company seems to have finally rid itself of its excess space.

Onvia said it plans to move its headquarters to downtown Seattle in January 2008 from its office near South Lake Union. Simultaneously, Onvia also agreed with its landlord and a third party to terminate Onvia's obligations under its current office lease at no additional cost.

What's more, as a result of these transactions, Onvia's cash flow will improve by about $2.4 million and its operating expenses will decrease by about $700,000 over a 28 month period starting January 2008.

In July, Onvia provided a $538,000 security deposit on the new lease, and upon termination of its existing lease, Onvia's $3.5 million security deposit on its current space will be returned.

Executives are feeling good about the move.

"The net result of the two transactions will be to increase our future cash balance, cash flow and earnings," said Mike Pickett, Onvia's chairman and chief executive. "In addition, the new lease will provide Onvia with additional space to handle our future growth needs."

Terry Brewer, executive director of the Grant County Economic Development Council, wrote in response to today's story on the data center boom in Quincy, that his organization has "responded to requests for information from more than a dozen clients and consultants representing clients who are researching sites for data centers."

And, of course, the interest is stretching beyond just Quincy, or just Grant County. Moses Lake, Wenatchee and The Dalles, Ore., are all benefiting from the same trend.

Base Partners, a San Francisco-based data center developer, is announcing plans to develop up to 400,000 square feet in Quincy.

The data center, slated for 68 acres of land in the agricultural community, would be the fourth in town, joining Microsoft, Yahoo and Intuit.

Aaron Wangenheim, president of Base Partners, said his company has been talking to several prospective tenants for the data center. The first phase of the project -- a 100,000 square foot building -- will be built on spec, he added, and should be completed within a year.

The Internet companies, including Google, have been attracted to the Columbia River basin for the cheap electricity from the region's hydroelectric dams. Data centers, which are basically huge warehouses full of server computers that run Internet sites and business databases, for example, are major consumers of power.

Base Partners, on this one-page PDF spec sheet on the project, lists "lowest power cost in U.S." as the top answer to the question, "Why Quincy?"

Wangenheim said the likes of Microsoft and Yahoo have been "trail blazers" in Quincy, helping smooth out what he called "infrastructure issues" in getting their data centers up and running.

"Yeah, there's a lot of power and yes it's cheap, but delivery to the sites is still difficult," he said, adding that water and sewer delivery is another challenge.

The "trail blazer" companies have started the process of resolving those issues, he said. "Those guys mitigated the risk for us."

At The Naked Truth event last night, I was able to catch up with a lot of people. And today the emails continue to pour in.

Here are a few tidbits and details to gnaw on:

-- Hardi Partovi, a founder of iLike, said the darnedest things happen when you have a social networking site -- like the time an iLike user invited Hadi to his wedding, even though it was on the East Coast and Hadi had never met the guy. And Hadi said he loves customer feedback, but there's one user who e-mails almost everyday. Now he's dying for another customer's feedback. He's also an avid iPhone fan, but not enough to stop carrying around his BlackBerry.

-- Speaking of iPhones, there were too many in the crowd to count. However, there was only one Ooma, and TechCrunch's Michael Arrington was giving it away. As he said, it's really cool, but if you don't know what it is, don't worry about it. Now I'm wondering who won it?

-- Co-founder Galen Ward of Estately.com introduced himself, and today he sent me a press release that said Estately was launching "True Area Search," a tool that lets anyone find homes within a half mile, mile, two miles, five miles or 10 miles of any neighborhood, city, Zip code or address.

-- I also chatted with Marcelo Calbucci, the founder and CTO (not CEO as I previously wrote), of Sampa, which helps individuals and small business build Web sites. A lot of the talk last night focused on creating a more cohesive community among entrepreneurs and tech startups. Calbucci blogged about the Naked Truth , and regularly maintains a blog focused on tech startups called Seattle 2.0.

-- A venture capitalist and a startup adviser were talking to Josh Hug, the CEO of Shelfari, which recently launched a Facebook application. They were obviously really excited about the launch, so I promised Hug that I would upload the application today to take it for a spin. So I did (and while I was at it, also uploaded iLike's Facebook application). Shelfari becomes a shelf that sits on my Facebook profile page. I can load it up with books I can recommend to friends. Unfortunately, when I searched for "The World according to Garp," the book I'm currently reading, I encountered an error. For now, my shelf is empty.

I talked to many other companies, too, including WetPaint, WildTangent, BlueDot, OthersOnline, Mobile Research, Alliance of Angels and Shiftboard.

Technology exports from Washington state grew 7 percent last year, totalling $3 billion, according to the trade association AeA.

Interestingly, Washington's high tech exports did not match the growth of the same goods nationally. U.S. high tech exports grew by 10 percent in 2006 for a total of $220 billion. The growing trade gap was also apparent in this category: as a country, the U.S. imported $322 billion in high tech goods last year, up 9 percent from 2005.

Also surprising was that Washington, a trade dependent state with a vibrant tech industry, ranked only 18th among states in the dollar value of tech exports. Only 6 percent of overall exports from Washington were considered tech related, landing the state in 41st place on that list.

So just what are we selling abroad? Industrial electronics, computers and peripheral equipment and semiconductors. The leading destinations were Canada, Taiwan and the Netherlands. Details of the AeA report are here.

Technology exports from Washington state grew 7 percent last year, totalling $3 billion, according to the trade association AeA.

Interestingly, Washington's high tech exports did not match the growth of the same goods nationally. U.S. high tech exports grew by 10 percent in 2006 for a total of $220 billion. The growing trade gap was also apparent in this category: as a country, the U.S. imported $322 billion in high tech goods last year, up 9 percent from 2005.

Also surprising was that Washington, a trade dependent state with a vibrant tech industry, ranked only 18th among states in the dollar value of tech exports. Only 6 percent of overall exports from Washington were considered tech related, landing the state in 41st place on that list.

So just what are we selling abroad? Industrial electronics, computers and peripheral equipment and semiconductors. The leading destinations were Canada, Taiwan and the Netherlands. Details of the AeA report are here.

The New York Times had an interesting essay yesterday by Stanford journalism teacher and writer G. Pascal Zachary exploring the character of tech entrepreneurs, including all the big names: Gates, Jobs, Woz, Page, Brin.

He describes the breed as "technological innovators who have a rebellious streak -- resenting and resisting established authority and its prejudices -- [that] took root in the 1960s counterculture."

Zachary also traces the influence of science historian Thomas Kuhn, whose 1962 book, "The Structure of Scientific Revolution," described the identification of "'paradigm shifts' as the key to advances in science and technology."

"When world views were overthrown by rebels, new paradigms could be constructed, opening the way for new theories, new facts, new technologies," Zachary writes. "... For people like Mr. Gates and Mr. Jobs, Kuhn's attack on conformity in science and technology provided a moral and intellectual foundation that still survives.

"Echoes of the Kuhnian sensibility can be heard around any corridor in Silicon Valley, any day of the week. In fact, misfits now rule Silicon Valley and its sibling, Seattle."

Unemployment in Washington fell to a record-low 4.4 percent in April, the third straight monthly decline this year, we reported today based on information released by the state Employment Security Department.

Some of the noteworthy job categories that added jobs include the construction industry, up 900 positions in April; administrative and support services, which added 1,600; and bars and restaurants, up 500.

But what about high-tech? And, telecommunications employment?

The short answer is: not much has changed.

According to the Employment Security Department, software publishers saw zero change in April, compared with a month ago, maintaining 47,000 jobs. In the last year, the sector has added 3,000 jobs.

For the wired telecom carrier sector, zero jobs were added in April compared with last month -- maintaining 6,700 jobs. Compared with last year, the number of wired telecom jobs dropped by 800.

Employment at wireless carriers saw the most dramatic change. In the month of April, 100 jobs were added for a total of 12,900. In the last year, that category has added 1,100 jobs.

Washington's high-tech industry added 4,500 jobs for a total of 156,500 in 2005, and the average worker made $83,700, according to the most current data available from the AeA, a national technology trade association.

The AeA, which has 2,500 member companies from all segments of the high-tech industry, released its 10th anniversary "Cyberstates" report detailing national and state trends in high-tech employment, wages, and other key economic factors.

The report, "Cyberstates 2007: A Complete State-by-State Overview of the High-Technology Industry," covers all 50 states, the District of Columbia, and Puerto Rico.

It found that Washington's largest and fastest growing sector remains software publishing, which grew by 2,100 net jobs in 2005 for a total of 41,100 jobs. In this sector, Washington ranks second, trailing California.

Other sectors that experienced significant growth here in 2005 included Internet services, which gained more than 1,000 jobs, and engineering services and computer systems design, which both gained more than 900 jobs.

David Anastasi, president and CEO of Bellevue-based Captaris, said in the release:

"Washington's tech industry remains vibrant and growing. Many people are aware that our software industry is one of the Evergreen State's greatest strengths, but they may not realize how fast it continues to grow. And they may not realize that several other service sectors are growing or that a broad set of investors continue to find Washington an attractive place to invest their capital."

The WSA put on its annual awards show last night, and by the size of the crowd and buzz in the room, the tech industry is going strong and continuing to propel the state's economy.

It wasn't exactly the kind of Silicon Valley-boom-era celebration with vodka poured continuously from an ice luge, but still ... well dressed people toasted with lemon peel martinis, and acrobats in red velvet suits dangled from rings on stage.

Among the highlights, emcee Dave Ross sang a hilarious "I Got YouTube" to the tune of Sonny and Cher's "I Got You Babe."

"I took a bath with a cat and a million people downloaded that," he crooned.

Zoodango CEO James Sun brought some energy to the graying crowd, and he was offered a date with the daughter of one of the presenters, evidently a fan of his on-the-job-performance as a cast member of NBC's "The Apprentice."

YouTube's new owner, Google, joined the festivities for the first time as a sponsor, and new WSA President Ken Myer said the association will partner with the Technology Alliance and other groups advocating state educational intiatives.

The strangest moment of the night occurred toward the end, when an excited Bill Baxter exclaimed "Jesus Christ!" right before the community choice award was handed to Logos Bible Software.

Otherwise, the awards themselves lacked much spice, since the companies have been around for some time already.

Here is a list of the winners:

Double award winner for best use of technology in the government or non-profit sector and service provider of the year:
The PTSO of Washington offers shared, cost-effective technology services, specifically designed for community health centers, offering unprecedented support for electronic clinical and business functions.

Technology innovator:Chris Diorio, chairman and CTO, Impinj
Diorio is also co-chair of the EPCglobal Hardware Action Group. Diorio received his Ph.D. from California Institute of Technology in 1997.

Business product:Attenex -- Attenex Patterns E-Discovery Software
An integrated software suite designed to reduce the cost and risk associated with e-discovery for litigation, regulatory requests and internal investigations.

Consumer product:Farecast --
Farecast.com is the first and only airfare prediction Web site. It's designed to help travelers decide whether to buy tickets now or wait.

Seattle had the largest trade surplus of any city in the U.S. last year, according to a World City study released today based on new census figures.

Seattle carried a $10.6 billion trade surplus in 2006. The year before, the city had a trade deficit of $2.9 billion. Guess what happened in between? Boeing sold a lot of planes.

This news comes on the heels of a report showing the U.S. trade deficit hit a record high for the fifth year in a row. Oil imports and Chinese goods contributed to the widening gap. The U.S. trade deficit grew 6.5 percent to an all-time high of $767 billion, according to the Commerce Department.

Here in Seattle, aircraft and aircraft parts made up more than half of the total $65 billion in exports last year. Seattle's international trade grew more than 19 percent to almost $120 billion, outpacing the 12 percent growth of the U.S. as a whole.

Other figures point to the importance of the region's trade relations with Asia. The volume of trade with Thailand, Malaysia, Singapore and South Korea rose significantly.

Canada and China, Seattle's top two trading partners, accounted for more than 40 percent of the total trade. Twenty countries did more than $1 million in trade with Seattle in 2006.

By the way, Seattle's top ten exports were aircraft, aircraft parts, computer chips, corn, soybeans, oil, computers, frozen fish, motor vehicles for transport and medical technology. Not sure where Microsoft software fits in, since it's not a computer or a computer chip.

The average salaries for both hourly and salary workers were not disclosed, but the cover of the magazine shows how ecstatic the employees are. A dozen or so are all lifting one particularly thrilled woman up in the air.

Here are the Washington state companies that made the list of 100 top companies to work for:

16. Starbucks: Ranked No. 29 last year. The average for a salary worker is $43,598, while hourly employees make an average of $35,797. Part-time employees are eligible for full benefits if they work 240 hours a quarter.

24. Nordstrom: Ranked No. 46 last year. Average for salary workers was $48,500. Hourly workers make $35,200. In 1988, people of color made up 24 percent of staff, and now it's 41 percent. In managerial ranks, 31 percent are people of color, and 72 percent are women.

27. REI: Ranked No. 9 last year. The average for salary workers is $87,519; hourly workers make $22,453. Last year it started offering health insurance to all part-timers.

30. Russell Investment Group: Ranked No. 63 last year. Salaries were not disclosed, but Russell has pumped 15 percent of pay into retirement accounts every year since 1975.

50. Microsoft: Ranked No. 42 last year. Average for salary employees is $118,500. Hourly workers make $52,560. New perks in 2006 included free grocery delivery, dry-cleaning service, valet parking. Annual summer picnic drew 30,000 employees and family members to the Cascades.

64. Perkins Coie: Ranked No. 48 last year. The average for salary workers is $142,027; hourly workers make $58,807. The law firm has anonymous happiness committees that roam through the office spreading cheer, often in the form of gifts left on desks.

Interesting that only one tech company from the state made the list. What perks would you want?

The Open Source Development Labs (OSDL) and the Free Standards Group, two of the leading organizations promoting Linux, said today that they will merge to form The Linux Foundation.

The organization saidthat together they will speed the growth of Linux by providing a comprehensive set of services to compete effectively with closed platforms.

Founding members include Fujitsu, Hitachi, HP, IBM, Intel, NEC, Novell and Oracle. Other members include every major company in the Linux industry, including Red Hat, as well as community groups, universities and industry end users.

Jim Zemlin, former executive director of the Free Standards Group, will lead The Linux Foundation.

"Computing is entering a world dominated by two platforms: Linux and Windows. While being managed under one roof has given Windows some consistency, Linux offers freedom of choice, customization and flexibility without forcing customers into vendor lock-in," Zemlin said. "The Linux Foundation helps in the next stage of Linux growth by organizing the diverse companies and constituencies of the Linux ecosystem to promote, protect, and standardize Linux."

The Linux Foundation, which will have offices in Beaverton, Ore. and San Francisco, will continue to sponsor the work of Linux creator Linus Torvalds. Torvalds is a Portland resident, who our columnist, Brier Dudley, describes as a cult figure among computer enthusiasts worldwide.

Brier has written many stories on the rivalry of having Seattle be the hub for Microsoft's Windows and Portland the center for open source.

In a sign that computer buyers might be holding off purchases until they can get their hands on Microsoft's new operating system early next year, computer shipments took a huge dive in October, reaching a low not seen in the 15 years the government has tracked the category.

The U.S. Department of Commerce reported today on orders and shipments of durable goods in October. Overall, shipments were up 0.6 percent to $210 billion.

Shipments of computers and related products stood at $4.72 billion in October, down 24.9 percent from September and 28.6 percent from October 2005, when shipments stood at $6.6 billion.

Technology industry analysts have forecast that the delay of consumer availability of Windows Vista past the holiday shopping season could cost the rest of the industry billions in lost holiday sales.

Tech companies maxed out the number of H-1B visas allowed this year even earlier than 2005, reaching the cap of 65,000 permits for temporary workers last week. Those visas are intended to be used over the next fiscal year, starting in October. Meanwhile, the immigration bill passed by the Senate would nearly double the cap to at least 115,000.

How would this affect our local tech economy? Bill Gates recently said he favored doing away with the whole program. But even in an economy that has been generally on the upswing, not every qualified IT worker here can find a job.

Seattle employment Web site Jobster, which counts Starbucks, Microsoft, Expedia, Google and eBay among its clients, is about to announce news about steady growth this week, mirroring a national uptick in the tech job market.

"We are seeing the hottest technology employment market in the Seattle market in years," Jobster CEO Jason Goldberg said in an email. "Competition for technology workers has increased dramatically over the past six months, with many candidates reporting multiple offers. Large employers such as Microsoft and Google (which is growing its Seattle presence) are now competing aggressively with small startups for tech talent."

The number of engineering and software development positions being posted online by Seattle area companies has grown more than 20 percent since August, he added. Better news, indeed, than simply fewer job cuts.
Update: Jobster says 115 new companies are using its service, and it added basic job listings from another 80,000 employers.

It's the fourth consecutive quarter in which tech job cuts fell below the level they were the year before. The figure for total job cuts in the first three months of 2006 was 39,379, compared to 59,537 last year.

Most of the cuts were attributed to consolidation in the telecom industry. The job outlook is brightest in areas like storage systems administration and information security.

The change was heralded as "territory not seen since the peak of the dot.com era" and IT workers were proclaimed to be "objects of bidding wars among desperate, labor-deprived employers."

Hmm. Since when did losing 40,000 jobs instead of 60,000 jobs suddenly become cause for such elation? Maybe when they report 60,000 new jobs gained I'll feel more optimistic.

Chief executives at U.S. companies backed by venture capital are getting paid $10,000 more a year in total compensation than they did a year ago, according to a survey published today by VentureOne, a unit of Dow Jones Newswires.

The survey, which looked at more than 700 executives at U.S. venture-backed companies, found that CEOs' median compensation was $263,000, compared with $252,000 a year ago. Part of that package was larger bonuses -- CEOs reported a median $50,000 this year compared to $40,000 a year ago.

The CEOs also have bigger stakes in the companies. This year, they said they owned a median of 5 percent, last year, it was 4.92 percent, and in 2004 they owned only 4.6 percent.

On average, however, executives in the Northwest are paid less. The survey found that executives here were paid a base salary of $200,000, a bonus of $41,000 and owned only 4.2 percent of the company. Total compensation was $250,000.

Here's the justification for the increase year-over-year: "The job is also requiring more from them as they lead their companies through more challenging investment climates, including longer periods of time between financings with requirements to hit significant milestones and a U.S. IPO market that remains constrained for exits," said Stephen Harmston, director of global research for VentureOne.